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Research Question/Issue Our study examines whether international corporate governance systems shape the relationship between a firm's engagement in corporate social responsibility (CSR) and their cost of financing (both equity and debt). Research Findings/Insights Using a large international sample, our findings reveal that although the link between CSR performance and the cost of equity is negative in a shareholder-oriented system, this relationship is positive in a stakeholder-oriented system. Furthermore, the link between CSR performance and the cost of debt is negative for firms that are close to default in both systems. Theoretical/Academic Implications Our study highlights the importance of considering the shareholder/stakeholder orientation at the country level to explain the link between CSR performance and the cost of financing. Our findings help to explain and place into context the previous mixed findings on the relationship between CSR and the cost of equity and debt and add to the debate about whether CSR is beneficial or detrimental to corporate governance. Practitioner/Policy Implications The analysis of how the country corporate governance system influences the effect of CSR performance on the cost of financing allows for a deeper understanding of how investors respond to CSR initiatives worldwide and offers managers, directors, and policy makers context-specific recommendations. Our analysis also highlights the limitations of transferring insights regarding CSR from one corporate governance system to another. The authors acknowledge support from the Projects FEDER UNC315-EE-3636, 2018-00117-001, 2016-00454-001, and 2016-00463-001 financed by the Spanish Ministry of Economy.

Purpose This paper examines if gender diversity on corporate boards promotes corporate social performance (CSP) across industries and across countries. Design/methodology/approach Fixed-effect panel models are estimated using Europe-wide data from 2002 through 2013. Instrumental variable estimation and propensity score matching are also used to control for potential endogeneity. Findings Board gender diversity (BGD) improves environmental and social performance and consequently the CSP. Although the positive effect of gender diversity is prevalent across industries, the effect is more pronounced for firms in emerging markets. Practical implications The findings suggest that gender law that fosters gender diversity can promote CSP in firms, and the benefit can be enjoyed with just an introduction of one female director to the board. Promotion of gender diversity in Europe is most beneficial in emerging markets. Originality/value The results provide new insights to the literature, as we find that a critical mass of female directors on boards is not required to promote CSP. The research also highlights that BGD enhances CSP irrespective of the industry, and the effect on CSP is more pronounced in emerging markets where regulations regarding CSR are not so clear-cut.